10-09-07 FPAC Agenda - Laserfiche WebLink

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• A.R EN jfiLLs CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA FINANCIAL POLICIES- FUND BALANCE Purpose The purpose of this policy is to establish guidelines for the City of Arden Hills' components of fund balances and net assets. Primary Policy Considerations 1. To meet the cash flow requirements of the City. 2. To maintain adequate fund balances and net assets in each individual fund of the City. 3. To provide for emergencies and contingency needs of the City. • Policy Statements 1. The Finance Director as a part of the annual budget process shall prepare an analysis of this policy. The analysis shall project the status of the budget year ending fund balances and net assets. 2. The Finance Director shall as a part of the annual audit and year-end financial statement preparation process see that the appropriate reservations and designations are correctly made. The designations established through this policy shall be used in designating funds for the year-end financial statement purposes. 3. The General Fund balance shall be designated for the following purposes in the amounts described below: a. To meet the cash flow needs of the city, a fund balance designation of not less than' of the ensuing years General Fund tax levy(less debt service transfers included in the General Fund levy)plus the ensuing years certified Local Government Aid (LGA) and Market Value Homestead Credit Aid(MVHC). b. To cover accumulated vacation and compensatory time balances and that portion of PTO leave that would be payable under the City's severance pay policy or union contracts. This amount shall be adjusted annually as part of the year-end • close and annual financial report process. \\Metro-inet\ArdenHills\Finance\Policies and Prmcedures\Policies\Fund Balance Policy.doc Last printed 10/5/2007 10:56 AM